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Your Strategic Planning Coach: Episode 3
SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats. "SWOT analysis" refers to a specific analytical process that helps organizations (and even individuals) develop strategies to maximize strengths, minimize weaknesses, capitalize on opportunities, and mitigate threats. It's a versatile tool used in business planning, marketing strategy, project management, and various other fields to inform decision-making and strategic direction. In a formal strategic planning process, it is the first formal step taken toward creating and implementing a strategic plan.
The POVs of SWOT
SWOT analysis views the organization or unit under consideration from two critical points of view (POV).
Looking Inward -- SW: The first two elements, SW, refer to internal aspects of the organization (or the specific segment or process) under consideration. Strengths are internal attributes and resources that provide an advantage over others in achieving objectives. Strengths include a strong brand reputation, unique technology, talented employees, and efficient processes.
On the other hand, weaknesses are internal factors that may hinder the achievement of objectives or put the entity at a disadvantage compared to others. Weaknesses might include a lack of resources, poor location, outdated technology, or ineffective management practices.
Gazing Outward -- OT: The last two elements, OT, refer to factors external to the organization. Opportunities are external factors or situations that could potentially benefit the entity if capitalized upon. Opportunities arise from market trends, regulation changes, technological advancements, or gaps in the competition.
Threats are factors or situations that could risk the entity's success or viability. Threats include competition from new entrants, economic downturns, funding downturns, changing consumer preferences, or regulatory changes.
SWOT Analysis as the First Step in Strategic Planning
Formal Strategic Planning typically involves several key steps or stages:
Establishing the Vision of the Organization
Conducting a SWOT Analysis
Setting Objectives and Goals
Developing Strategies and Tactics (including answering the questions of who?, what?, when?, how?, and how much? for EVERY goal).
Unfortunately, many strategic planning processes end here. Worse, some so-called strategic plans stop with step three and do not clearly identify who is responsible (and accountable!) for doing what, with precise target dates and budgets (of time, talent and financial resources).
Strategic planning, done strategically, means that you are creating a living document that is not meant to be shelved until the next time management calls for a new plan. Instead, a strategic plan should be an essential foundation for everyday decision-making. Therefore, to have a fully functional strategic plan, the process also includes:
Implementing the Plan
Monitoring and Evaluation
Adapting and Iterating.
Mission and Vision: What's SWOT Got to Do with It?
[For more on mission and vision in strategic planning, view episode 2 of this series.]
As a practical matter, strategic planning starts with the "mission" of the organization. The mission is a concise statement that defines the organization's fundamental purpose. It answers the question: "Why does this organization exist?" A well-crafted mission statement communicates the organization's core values, target audience, primary activities, and overall objectives. Without a mission, there is no practical starting point for planning. But the mission statement is just a starting point.
Planning requires more than just knowing what your mission is. Strategic planning emerges from vision. More specifically, the launching pad for a strategic plan is the organization's vision for fulfilling its mission during the months or years covered by the plan (usually 1-5 years, with 3-5 years being the most popular).
In some cases, there is already a clear sense of vision to push the planning process forward. If so, the next logical step is the SWOT analysis.
In many (if not most!) cases, however, especially where strategic planning is new to an established organization, strategic planning must also include the development and clear articulation of your strategic vision. In these cases, starting with a visioning exercise before doing a SWOT analysis is putting the cart before the horse. Suppose a clear vision is not already embedded in the organization's DNA. In that case, a SWOT analysis is a perfect means for creating and articulating the vision for how you will fulfill the corporate mission during the planning horizon (usually one to five years).
In some cases, there may even be the need to reconsider, and then significantly alter or abandon the mission. In these cases where the organization's mission is part of the problem that needs to be solved, the SWOT analysis functions as the first step of the process. Then, once the mission is solidified, visioning can take place.
Therefore, " visioning " generally follows from and builds upon the SWOT stage. Once the vision is settled, setting objectives and goals and developing strategies and tactics follow. (For more on the visioning stage and the development of a Vision Statement, view episode 2 of this series)
Some Practical Matters for SWOTing
Who should participate in the SWOT? The SWOT analysis should include all key personnel involved with the organization or subunit undertaking the planning process. In larger organizations, the participants would be key leaders and representatives of all unit segments under consideration. In a smaller organization, it often helps build morale and a shared sense of direction if you involve all members.
I have found that the most productive SWOT and Visioning sessions have been face-to-face encounters. Depending on the organization's size, you may not be able to have optimally sized groups (10-15 has been a sweet spot in my experience).
If you have over 20 participants, consider break-out sessions of 8-12 people led by facilitators. You can also consider doing the first level SWOT by sending questionnaires before conducting face-to-face sessions. Then, report the findings of the SWOT to the assembled group and discuss and prioritize them as a first step toward visioning.
Since COVID, many of us have gotten pretty good at virtual meetings. This raises the obvious question of whether virtual meetings are as effective for strategic planning as face-to-face ones. From my experience, virtual meetings are better than no meetings at all. But if you can do the visioning process face-to-face, it will produce better results.
Do you have to do them in that order: S then W then O then T? Early in my strategic planning career, I learned a psychological trick that tended to make the strategic planning process not only more positive and enjoyable for (me! and) the participants but seemed to make the process more effective (no, I don't have empirical proof, but I have experienced much proof in the pudding!). I learned to do SWTO analysis!
By switching the order of Opportunities and Threats, the SWOT (now SWTO) analysis has a natural ark from positive (starting with internal positives) to negative ( journeying first through internal and then external negatives) and back to positive (ending up with positive externalities). I still called it SWOT so anyone familiar with formal strategic planning would not be confused. Still, I used the opportunity to change to reinforce a trajectory toward positive outcomes.
Post-it Notes: As I searched for good visuals for this blog, I was delighted to see scenes including the ubiquitous wall of post-it notes. Believe it or not, using color-coded post-its to capture, display, reorder, visually link, and prioritize the elements of a SWOT never fails to nurture thoughtfulness, personal buy-in, and even a sense of playfulness.
May the SWOT Be with You!
SWOT analysis is a strategic tool used by organizations of all types to evaluate their Strengths, Weaknesses, Opportunities, and Threats. It provides a comprehensive overview of internal and external factors affecting an organization's performance and potential. SWOT analysis guides decision-making processes, aiding not only in formal strategic planning, but also in goal setting, resource allocation, and any number of other strategically critical decisions. It offers insights crucial for organization to adapt to changing environments and foster sustainable growth. Ultimately, SWOT analysis serves as a foundation for crafting informed strategies that align with organizational objectives and enhance overall performance.
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by Russell E. Willis
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